Marty Whitman : 2Q 2008 Shareholder Letter

Third Avenue Funds's Second Quarter 2008 Shareholder Letter is out. Marty Whitman wants to concentrate more heavily in two areas of distress – first,investing in credit instruments where the great weight of probabilities are that the securities, available at yields to maturity of around 20%, would either never miss a contracted for money payment; or alternatively, would, upon reorganization become a fully credit-worthy zero coupon bond; and second, investing directly into the common stocks of well-financed, but troubled issuers, where the capital infusions by TAVF were at prices of between 20% and 30% of Net Asset Value (“NAV”), and, perhaps, three to five times normalized earnings to be expected after the current credit market crisis ends.

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